I've never been so torn on a stock.
How can you come to any conclusion?
I've written and changed this post 20 times and still cant decide where I sit.
1. Management
On one hand they could be considered the most inept Ive ever seen, esp when it comes to deal making to the benefit of shareholders and corporate governance.
Tipsly is a disaster, should never have bought that, IMO the $12m revenue is BS
On the other hand they have somehow managed to get a stock with no real market cap to springboard the business concept via some creative financing into a possible global marketing powerhouse.
The Yellow Pages on steroids
So could I suggest board changes are needed?
2. Product
I like it overall, I think pricing is way too high and needs to be adjusted, I think more should be done at time of video production, ie: sales next door are needed while production is happening, not sure this is the case, info pack sent to every neighbouring business, sausage sizzle using the signed up not for profits if need be.
3. Financials
Oh, where do I start.
I like the FCC financing, actually have grown to accept the terms for what they are.
When your market cap is $20m or less and you have limited funds, and you want to do a massive ground sweep, raising $5m for shareholders ain't gonna do it, so I understand, i don't have issue with 24% either, you can absorb costs into the packages, the % FCC charge is not the issue.
As Bean and others have pointed out, needs to be more notes and separation of the different income/revenue streams.
4. Growth
They are their own worst enemy, due to the financial agreement with FCC, which helped with growth but can also stunt growth once cap is exhausted.
I think they should hit up FCC for another $50m credit line, but this line to be used only once SB's accept the Video.
US market needs to be penetrated and fast.
5. Sustainability
See above re growth.
However, I really don't know the answer.
So am I buyer?
No more share issuance for mates rates
No more share issuance to buy a business where you don't set the "price" whether paying in shares or not.
Board needs to change
Only get upfront payments from FCC on approved customers
Adjust pricing on packages
Penetrate more SB's when you have a live one. Salesforce needs to be front and centre at the video production day, not smoking hooch out the back of the dunny at the Southport call centre.
Do the above and I'm a buyer, subject to ASIC/ASX finalisation.
